Correlation Between Empire State and Abingdon Health
Can any of the company-specific risk be diversified away by investing in both Empire State and Abingdon Health at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Empire State and Abingdon Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire State Realty and Abingdon Health Plc, you can compare the effects of market volatilities on Empire State and Abingdon Health and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Empire State with a short position of Abingdon Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and Abingdon Health.
Diversification Opportunities for Empire State and Abingdon Health
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Empire and Abingdon is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and Abingdon Health Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abingdon Health Plc and Empire State is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Empire State Realty are associated (or correlated) with Abingdon Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abingdon Health Plc has no effect on the direction of Empire State i.e., Empire State and Abingdon Health go up and down completely randomly.
Pair Corralation between Empire State and Abingdon Health
Given the investment horizon of 90 days Empire State Realty is expected to generate 0.64 times more return on investment than Abingdon Health. However, Empire State Realty is 1.55 times less risky than Abingdon Health. It trades about 0.09 of its potential returns per unit of risk. Abingdon Health Plc is currently generating about -0.14 per unit of risk. If you would invest 945.00 in Empire State Realty on September 1, 2024 and sell it today you would earn a total of 151.00 from holding Empire State Realty or generate 15.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Empire State Realty vs. Abingdon Health Plc
Performance |
| Timeline |
| Empire State Realty |
| Abingdon Health Plc |
Empire State and Abingdon Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and Abingdon Health
The main advantage of trading using opposite Empire State and Abingdon Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State position performs unexpectedly, Abingdon Health can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Abingdon Health will offset losses from the drop in Abingdon Health's long position.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| Abingdon Health vs. Samsung Electronics Co | Abingdon Health vs. Samsung Electronics Co | Abingdon Health vs. Hyundai Motor | Abingdon Health vs. Toyota Motor Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |